Market analysts’ fears that the recent terrorist attacks in Israel would have a detrimental effect on the stock market were proven false this week.
In contrast to feared drops of 5 percent to 10 percent, the Tel Aviv Stock Exchange was only moderately lower – about 1 percent – when trading resumed Wednesday after a day off for the Purim holiday.
Some analysts had believed that foreign investors, who have been increasingly attracted to Israeli markets as a result of the peace process, would start selling as a result of the recent spate of suicide bombings in Jerusalem, Tel Aviv and Ashkelon.
But as the week progressed, analysts began predicting that foreign investors would continue to invest in the region and that the determining factors in the financial markets would be the same – the budget, the balance of payments and interest rates.
In another development, the Bank of Israel announced that Israel’s foreign currency reserves increased by $857 million in February 1996 to a total of $9.89 billion.
The central bank reported that the increase was primarily due to Israel’s receipt of the remainder of the United States’ 1995 aid package.
Meanwhile, Tourism Minister Uzi Baram established a special committee of tourism industry leaders to come up with a strategy to deal with the impact the terrorist attacks might have on tourism.
The Tourism Ministry said that Thursday that 2,000 people had canceled planned trips to Israel as a result of the terror attacks.
But Baram said that if the attacks do not continue, no long-term effects will be felt by the industry.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
